Hamersley v MacDermott - [2023] WADC 23

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   HAMERSLEY -v- MACDERMOTT [2023] WADC 23
CORAM:   DEPUTY REGISTRAR HARMAN
HEARD:   ON THE PAPERS
DELIVERED          :   1 MARCH 2023
FILE NO/S:   CIV 2882 of 2022
BETWEEN:   LEONARD HUGH HAMERSLEY
First Plaintiff

JANE LAIDLEY HAMERSLEY
Second Plaintiff

AND

MICHAEL JOHN MACDERMOTT
First Defendant

WESTBURY HOLDINGS
Second Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court 1971 (WA) - Application for summary judgment - Order 14 of the Rules of the Supreme Court - Application for costs on behalf of the respondents upon dismissal of the application for summary judgment

Legislation:

Rules of the Supreme Court 1971 (WA), O 14 r 8, O 66 r 48

Result:

Defendants awarded the costs of the application

Representation:

Counsel:

First Plaintiff	:	Mr C P Stokes
Second Plaintiff	:	Mr C P Stokes
First Defendant	:	Mr B G Grubb
Second Defendant	:	Mr B G Grubb

Solicitors:

First Plaintiff	:	Chris Stokes & Associates
Second Plaintiff	:	Chris Stokes & Associates
First Defendant	:	Tudori Hager Grubb
Second Defendant	:	Tudori Hager Grubb

Case(s) referred to in decision(s):

Nil

DEPUTY REGISTRAR HARMAN:

The plaintiffs commenced the action for recovery of the balance due under loan agreements between themselves and the defendants. They brought an unsuccessful application for summary judgment. At the conclusion of the hearing, the parties agreed that the issue of liability for the costs of the application would be deferred pending provision of written submissions and that a determination be made without further appearance by the parties.
The submissions have now been filed.
Order 14 r 8 of the Rules of the Supreme Court 1971 (WA) (RSC) provides in part as follows:
(1)If the plaintiff makes an application under rule 1 and the case is not within this Order, or if it appears to the Court that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, the Court may dismiss the application with costs, and may require the costs to be paid by the plaintiff forthwith.
Order 66 r 48 of the RSC provides in part as follows:
(1)Unless the Court otherwise orders, the costs of a motion or application in an action shall be deemed to be part of the costs of the action of the party in whose favour the motion or application is determined unless the motion or application is unopposed.
The plaintiffs oppose an order for costs in favour of the defendants.
Order 14 of the RSC provides a process by which a plaintiff may apply for summary judgment. From the perspective of the applicant the result of success would reduce the cost of bringing its case to trial. In the event that the application is unsuccessful, it is likely that it would be revealed as having generated additional costs in the proceedings.
Like any other form of interlocutory application, an application for summary judgment would be made voluntarily. It is appropriate to consider that prior to embarking upon the process, the applicant had been informed of the risk associated with the exercise. A respondent intending to oppose an application has no choice but to allocate resources to the task. Part of the risk in bringing any interlocutory application is, that failure may result in the costs generated by the provision of those resources being payable by the applicant.
Like any other form of interlocutory application, an application for summary judgment may be unsuccessful for a range of reasons, however, ultimately applications fail because they either would not or do not justify an exercise of discretion in favour of the applicant. In the instance of an application for summary judgment, the standard that would determine whether to exercise discretion in favour of an applicant is that a clear case for judgment has been established.
In considering the appropriate order for the costs of an unsuccessful application for summary judgment, as a matter of what may be characterised as principle, there is no reason to distinguish the failure of such an application from the same result in any other form of interlocutory application. As a matter of practice, there is no reason to consider that by O 14 r 8 of the RSC, the court had intended to somehow reduce the risk expressed by O 66 r 48(1) of the RSC.
Against the proposition that the defendants recover their costs of the application, the plaintiffs put two propositions that may result in the defendants not recovering the costs generated by their response to the application and the plaintiffs recovering their costs of the exercise.
One proposition is that the costs of the application be in the cause. The essence of such an order is that its engagement ignores the result of the substantive application. Such an order is often made in the event that an application for summary judgment fails, however that is due to the parties agreeing to such an order being made.
The imposition of such a result would suggest that it had been considered that the respondent had allocated few, if any resources to the task of opposing the application. Because it is likely that the resources put to the task of defeating such an application would be at least the presentation of depositions, preparation for the hearing and the utilisation of hearing time, it would be a rare application that would be likely to justify such a result.
The significance of the dismissal of such an application is that the result reveals that it ought not have been commenced. The significance of that observation is not simply that there had been an unfortunate choice made at the point of assessing risk, but more fundamentally, it emerges from reflection upon the requirement that an applicant would depose that there is no defence to the claim.
Because the standard in accordance with which judgment in favour of a plaintiff would be established is less stringent than that which had applied at the point of considering whether to exercise discretion in favour of an applicant, it would be a struggle to find any more logic in the prospect that the result obtained at trial would determine whether a successful respondent would recover its costs of the application, than there is in the proposition that it would speak to whether a successful application might have been brought. Success at trial would neither justify the provision of services for the purpose of the application nor the imposition of the cost of those services on a successful respondent.
In this instance it is evident that the costs generated by the exercise of responding to the application had been significant. The defendants have provided depositions and have filed submissions. The submissions reveal the extent of preparation for the hearing. Some time was devoted to the hearing. Any trial of the action is likely to be some time sufficiently far into the future, that the benefit generated by the provision of those parts of the service provided to the respondents, will have been eroded by the time that the defendants' solicitor brings some focus to the task of preparation of the case for trial, and preparing for trial. It is inevitable that the results of the application having been brought, will not endure to a sufficient extent to obviate the need for the future provision of any services to the end of there being a trial.
The alternative proposition of the plaintiffs is that the costs be reserved for determination at the conclusion of trial. There would be little logic to be found in removing the person before whom the substantive application had been presented from the context in which costs will be determined. From the perspective of both each of the parties and of the court, the most efficient process for dealing with costs would be for the parties to provide submissions before the person that determined the substantive application. To follow the course proposed by the plaintiffs would impose an unnecessary additional burden on each of the parties in preparing submissions in relation to the costs of the application and upon the court in familiarising itself with issues in an application that it had not considered.
In the event that the successful respondent is unsuccessful at trial, there is also scope to discern that procedural unfairness may emerge, in the form of the recent result at trial complicating its task in discharging the onus. Ultimately there is a risk that success at trial would confer an unmerited advantage upon the plaintiff.
Although after the trial the court would have the benefit of considering the extent to which pleadings may have changed since the application was determined along with the impact of particular evidence, there is no reason to consider that those prospects would outweigh consideration of the value of the services provided to the successful respondent to the application.
In this instance, it is likely that the costs generated in the course of responding to the application will account for a significant portion of the cost of their representation over the course of the proceedings.
There is no reason to consider that it would be more appropriate that the court constituted other than by the person that heard the application would be better placed to determine where the result of the application for costs should lie.
Ultimately, the issue to be considered is whether the additional costs in the hands of each of the parties generated by a failed application that was voluntarily made by the plaintiffs ought not to be visited upon the plaintiff. It would inevitably follow from dismissal of the application that the defendants ought to recover their costs of the application. That result simply reflects the rule.
The submissions advanced by the defendants refer to the prospect that indemnity costs may be ordered in circumstances where an offer of compromise has been made that proves more favourable than the outcome and they refer to the fact that such an offer was made. As they had previously provided to the plaintiffs, what they contend is an offer, the acceptance of which would have achieved a better result for the plaintiffs than has been achieved, it is open to consider that the defendants would seek their costs of the application on an indemnity basis.
The offer was provided to the plaintiffs when the hearing was imminent. By the offer the defendants proposed to resolve the issues in the litigation. It was put on the basis that the application would fail. There is no reason to consider that any adverse result for the plaintiffs should flow from the fact that the defendants accurately predicted the result of the hearing. The defendants do not otherwise advance a case for an order for indemnity costs. Rather, they put a case that the offer would justify an award of costs in their favour.
There is no reason to consider that an order for indemnity costs would be appropriate in circumstances where the plaintiffs brought an application despite the risk of there being an award of costs in favour of the respondents. That it is inevitable that the costs of the proceedings have been enhanced as a result of the application being made, is not sufficient justification to award indemnity costs against the plaintiffs.
Accordingly, the result of consideration of the result of the substantive application and of the submissions provided by each of the parties is that the defendants are entitled to the costs of the application. There is no reason to consider making an order for immediate payment.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
JV
Associate to Registrar
3 MARCH 2023